Forecourt finance up

Consumer demand for new car finance grew for the eighth consecutive month in April, according to new figures from the Finance & Leasing Association.  In April this year, dealer finance provided to consumers for new cars was 20% higher than in April 2009.  April is the first month since the beginning of 2009 where the figures have not been artificially boosted by Government incentives and so the latest figures give a truer picture of underlying demand for car finance.

Although dealer finance is still not back to pre-recession levels – this April 17% less credit was provided to consumers than in April two years earlier – there is cause for optimism. The rise in the number of new and used cars bought in April, 16% and 6% respectively, shows that there is still demand in the motor market and that consumers are confident about committing to car purchases and loan repayments in the coming months and years.

Commenting on April’s motor finance figures, Paul Harrison, Head of Motor Finance, said: “These figures are good news for dealers and finance providers, especially since the drop in demand that we saw in other countries when scrappage schemes ended, has not been repeated in the UK.

“Both new and used car finance sales were positive in April.  But we expect to see sales of new cars declining in the second half of the year as consumers return to the used car market as the stock of used car increases.

“We are hoping that the Chancellor will deliver a Budget for economic growth that helps motor lenders to build on the early signs of consumer confidence that we have seen in the last eight months.”